“Many advisers believe that when these clients realise what they are being charged, they will fail to see value and advisers will run the real risk of losing them as clients. And as most advice businesses only make 10-30% net profit, they simply can’t afford to lose them.”

Egger is therefore urging advisers to start re-engaging with disengaged clients as soon as possible. “In this environment, we have to be proactive in order to remain profitable,” he said. “We have to demonstrate the value of our services well before sending the FDS. Leave it too long and it will simply be too late.”

The challenge, however, is how to engage the disengaged. “There’s no denying that trying to win over these clients is going to be difficult. We therefore have to make sure our approach is direct, simple and all about the client.”

The Fold Legal managing director Claire Wivell Plater says that whether advisers lose clients will depend on how clearly the adviser group has communicated with clients about their fees.

She says that she has dealt with adviser groups who sent all of their statements out in one foul swoop, which she called “very brave, in the Sir Humphrey Appleby sense”.

“You could potentially have a mass of complaints and a mass of clients dropping off and having to deal with this sort of incredible client management.”

However, the advisers felt that they had been clear with clients all along so there would be no problem. Some groups gave individual advisers a bit of discretion so that if they felt there was going to be an issue, they could smooth the way for the client, says Wivell Plater.

Egger has been re-engaging clients through a client engagement platform he developed. AstuteWheel includes engagement tools like a five-minute financial health check questionnaire that reveals how financially healthy clients are across six key areas of financial planning.

Clients can disengage for a number of reasons, according to Egger. “It may be that they are part of a book of clients you bought but never met. They might have moved interstate or overseas and found it difficult to visit your office, or they might simply not understand all you can do for them. The AstuteWheel helps overcome these challenges because clients can interact with it in their own time and place.”